Caledonia Argus

Board will look at capital loan options

Posted: 3/2/04

By David Heiller
Argus News Editor

The Caledonia School Board heard some options about repaying its capital loan at its February 23 meeting.

ISD 299 is one of 21 maximum effort capital loan districts in Minnesota. Due to special legislation. the district received a $14.1 million loan from the state to pay for part of the $23.4 million new middle/high school building and remodeling of the former high school for use as an elementary school.

The contract with the state is for up to 50 years or until the loan is repaid, which is estimated to be in 2036. Under the terms of the contract, the board has to levy 32 percent of the districtís adjusted net capacity.

This money is first used to make payments on the districtís bonds that have been issued. If the maximum levy amount is greater than the required payment, the money needs to go back to the state to make payment to that capital loan. So does the extra state aid that the higher levy generates.

For example, the maximum levy effort in 2004 was $1.06 million, which was $175,399 more than the initial debt levy of $949,998. That extra money is applied to the loan.

The Minnesota House of Representatives is considering lowering the 32 percent levy rate to 28 percent, which would lower the tax impact.

For example, a home valued at $100,000 would have a debt service tax of $300 at the 28 percent rate, as opposed to $343 at the 32 percent rate.

All of this puts Caledonia in a unique situation, financial advisor Kristin Hanson told board members last Monday.

She said refinancing the capital loan might make sense because of low interest rates. This would not require a referendum. It would raise tax rates in the short run, but the reduction in the length of time of the loan would save the district money in the long run.

Hanson said another option would be to ask voters to approve what is called a one day bond sale. If approved, it would allow the money that is being returned to the state to be used for capital improvements such as a new roof, technology, or parking lot improvements.

Board member Chuck Schulte said refinancing might be a good option because interest rates are favorable, so it would shorten repayment time and ultimately save taxpayers money.

The board will discuss this more at its March 29 school board meeting.

Other business

ï The board passed a motion 4-1 to not pursue tree planting on the school property. Fruechte said she felt the board was not ready to look at it at this time. Barb Hurley was the dissenting vote.

ï Elementary principal Connie Hesse told the board she was implementing a policy for students in grade three and five who fail the Minnesota Comprehensive Assessment test: they will be required to attend summer school in August. She said this goes back to the school board retreat in December at which board members wanted students to be more accountable.

Hesse also would like to see the elementary school become a ìSchool of Excellence.î This program, sponsored by the Minnesota Elementary School Principalsí Association, requires a year of self study in the areas of organization, leadership, curriculum and instruction, staff development, school climate, and assessment.

She said it affirms what the staff is doing right, and points out components that need work. She got this as a goal after attending the principalsí convention.

ï Science teacher Cheryl Utecht explained the middle/high science program to the board. Klabunde plans to bring a teacher explain each department over the coming months.

She felt not enough money was being spent per student per year in science, and that her department could use another half-time teacher. ìThat would be the dream answer, more people, more money,î she said.

ï Community education director Nancy Runningen told the board that community education wouldnít be running the summer ball program this year. The City of Caledonia is taking it over to save money. She said community education would focus on summer enrichment.

At Hurleyís suggestion, Runningen said she would consider conducting a survey to determine what the interests are.

Runningen said the number of offerings had increased over last year by 16, and that there were 55 classes in the spring catalogue.

Hurley suggested that community eduction do a survey to see where interests lie. Runningen said would look into that.

ï The board passed a motion to continue looking into wind energy for the school. Fruechte and Schulte reported on a meeting that they attended at the school on February 11 about this.

Arnie Ideker, a member of the Tri-County Electric board of directors said the co-op wanted to cooperate with the city and school on it. ìWeíre interested in encouraging conservation and green power,î he said.

ï The school district will be sending a bus into Hokah next year, Klinski said. There are students from Hokah who attend Caledonia schools, and the bus already goes within two miles of the city, he said.

ï The board adopted a revised budget. Schulte asked if there was a plan to increase the general fund balance, which is projected to be $284,495.

Tool said that the board would need to take appropriate action before June 30 that could include staff reductions. He said the fund balance had a substantial increase, and there would be more next year. He expects there will be great debate as cuts are proposed.

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